Kenya’s Debt Burden to Hit Sh2.31 Trillion in 2026/27

Kenyan taxpayers are staring at a historic fiscal crunch as debt-servicing obligations are projected to reach a staggering Sh2.31 trillion in the 2026/27 financial year, threatening to crowd out development and essential public services.

According to a report by the National Assembly’s Public Debt and Privatisation Committee, the debt burden will consume a massive 90% of the Consolidated Fund Services (CFS), the government’s pot for mandatory expenditures, within the larger Sh4.78 trillion national budget.

The committee’s report exposes a structural imbalance in how the country spends its revenue, revealing that Kenya is spending significantly more to service past debts than it is investing in its future growth:

• Interest vs. principal: Of the Sh2.31 trillion debt bill, Sh1.25 trillion will go toward paying interest alone, while Sh1.06 trillion will cover principal repayments.
• The GDP ratio: Interest payments have climbed to 6% of the Gross Domestic Product (GDP).
• Development squeezed: In comparison, planned development spending, the engine for infrastructure and job creation, lags at just 3.6% of GDP.

By June 2027, Kenya’s total public debt stock is forecast to skyrocket to Sh14.12 trillion, a figure that aggressively breaches the country’s statutory debt anchor of 55% of GDP in present value terms.

A looming crisis

The rapid escalation of these costs has sounded alarm bells in Parliament. Committee Chairman Abdi Shurie warned that without immediate intervention, the fiscal strain will soon reach unmanageable levels. Projections indicate that debt-servicing costs are on track to triple by the 2029/30 financial year.

“We need urgent, aggressive interventions,” Shurie stated, calling on the National Treasury to implement more robust cash management strategies and aggressively pursue debt restructuring to ease the immediate pressure on the exchequer.

The report highlights a tightrope walk for the administration, which must balance tax collection targets against an increasingly heavily taxed population, all while ensuring the country does not default on its international and domestic debt obligations.

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